How We Built the Ghettos

by Jamelle Bouie

Jamelle Bouie is a staff writer at The Daily Beast. His reporting and analysis has appeared in The American Prospect, The Nation, The Atlantic, CNN.com, and The Washington Post.
He covers campaigns and elections, as well as policy and public
opinion. He is based in Washington, D.C. You can follow Jamelle on
Twitter at @jbouie.

Yesterday, apropos of Paul Ryan’s remarks on “inner-city poverty” and
a culture that “doesn’t value work,” I wrote about the policy that went
into building our inner-cities and depriving whole communities of
wealth and opportunity. Likewise, at MSNBC, Ned Resnikoff wrote an excellent
piece on the wide income and wealth disparities between blacks and
whites. “ In 1984,” he writes, “the white-to-black wealth ratio was
12-to–1…But over the next 14 years the wealth gap began to grow once
again, until it had skyrocketed up to 19-to–1 in 2009.”

A large part of this, he explains, has everything to do with housing discrimination:

Disparities
in homeownership are a major driver of the racial wealth gap, according
to a recent study from Brandeis University. According to the authors of
the report, “redlining [a form of discrimination in banking or
insurance practices], discriminatory mortgage-lending practices, lack of
access to credit, and lower incomes have blocked the homeownership path
for African-Americans while creating and reinforcing communities
segregated by race.”

In my earlier piece, I alluded to these
policies and practices, but didn’t describe them. But it’s worth taking
the time to do exactly that, given the extent to which they were a huge
influence on the housing landscape of the United States, and key to
creating the ghettos and housing projects that litter our inner-cities.
Obviously, this won’t be comprehensive, so consider it an introduction
to these issues.

Redlining is the practice of denying key
services (like home loans and insurance) or increasing their costs for
residents in a defined geographical area. In theory, this could be used
against anyone. In reality, it was almost exclusively a tool to force
blacks (and other minorities) into particular geographic areas. The
practice began with the National Housing Act of 1934, which established
the Federal Housing Administration, as well as the Federal Home Loan
Bank Board. It was this agency which created “residential security maps”
for several cities to determine the safety of real estate investments
in selected areas.

You should already see where this is going:
Existing black neighborhoods were lined as unsafe, and thus ineligible
for financing. For prospective property owner, this was terrible: Absent
cash on hand, there was no way to afford a home or a business in your
area. What’s more, blacks were all but barred from entering white
neighborhoods, if not by restrictive racial covenants (which
forbid property sales to African Americans and other minorities) then by
violence and intimidation. In Chicago, for instance, anti-black riots
were a regular part of public life....